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Vicor Idea Proposal (VICR, NVDA)

Vicor Idea Proposal (VICR, NVDA)
 

How quickly will data centers ramp up their purchases of Nvidia GPUs powered by Vicor technology?

Report Available: February 7, 2019

 

Blueshift’s initial research found VICR’s revenue spiking as artificial intelligence and other data center trends increase demand for better power sources. VICR’s Power-on-Package technology is generating buzz as big players like NVDA have climbed on board. VICR does not have any meaningful competition at the moment, though solutions based on gallium nitride could be a factor in the next few years. A big question facing VICR is how quickly data centers will move to 48-volt power.

 

Observations

  1. VICR, a manufacturer of power components, continued its ascent in Q3 as revenues climbed 37% year-over-year and its order backlog topped $116 million. The company is benefiting from increased demand for denser and more efficient power sources as computing needs become more intense and motherboards become more crowded. Blueshift’s Oct. 4, 2018, report said VICR has an unmatched and universally lauded solution with its newest chip-powering technology, Power-on-Package.
  2. VICR’s near-term success is closely tied to the fortunes of NVDA. The leading GPU maker has introduced chips for artificial intelligence and other power-hungry applications in hyperscale data centers that are powered by VICR modules, including its Tesla V100 GPUs, which are part of its DGX and HGX server platforms. NVDA’s sales into data centers have exploded in the last two years, including a 58% rise in data center revenues in Q3.
  3. Sources in Blueshift’s June 28, 2018, report said NVDA’s astonishing growth in sales to data centers should continue unabated in the near term as its GPU technology is the undisputed leader for the bulk of the artificial intelligence work underway in enterprises and government agencies. All 14 sources in Blueshift’s January 10 Tech Trends report said NVDA stands on the verge of an explosion in next-gen data center fabric design as AI development aimed at quickly and cost-effectively running complex workloads has opened the doors wide for NVDA’s products.
  4. Another key to VICR’s success will be how quickly data centers move from 12-volt to 48-volt power distribution systems, to which VICR’s Power-on-Package is geared. Sources in Blueshift’s October report said the transition is already underway with hyperscale data center operators because 48-volt power offers a host of advantages, but seven sources said five to 10 years may pass before 48 volts are the norm. The switch could happen much faster, however, with new data centers. For example, GOOG/GOOGL, which has written 48-volt power into its specs for new server racks, is considering a new $600 million data center in Minnesota. In the meantime, VICR has introduced a 12-volt to 48-volt converter, but it’s not clear how appealing a solution that is for data center operators.
  5. There are no other solutions on the market that appear to challenge VICR. However, several companies—including some major chipmakers—are working on power modules based on gallium nitride (GaN) rather than silicon. The switch to GaN could eliminate some of VICR’s technical advantage, one source in Blueshift’s October report said, and such products could be on the market in 2019. VICR could be vulnerable to this new generation of GaN-based designs because its products are expensive and because others have deeper relationships in data centers. But VICR Chief Executive Patrizio Vinciarelli dismissed concerns over GaN during an October conference call with analysts. He said GaN provides no efficiency advantage at the point-of-load and that the industry’s focus on it is misplaced.

 

What kind of ramp are data centers expecting on their purchases of NVDA chips that are powered by VICR? Is the enthusiasm over VICR’s Power-on-Package justified? How quickly will data centers convert to 48-volt systems? Is VICR making progress with other chipmakers like INTC and AMD? Should VICR be concerned about GaN-based solutions? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Data center operators, Electrical engineers, Chip designers, and Industry specialists.

 

Companies: Vicor Corp. (VICR), Alphabet Inc. (GOOG/GOOGL), Advanced Micro Devices Inc. (AMD), Intel Corp. (INTC), Nvidia Corp. (NVDA)

 

Research Begins: January 21, 2019

 

 

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